Leggett & Platt (LEG +15.52%) stock is booking big gains in Tuesday's trading. The bedding-and-furniture company's share price had surged 14.2% higher in the day's trading as of 3:30 p.m. ET amid the backdrop of a 0.4% gain for the S&P 500 index.
Leggett & Platt published its third-quarter results after the market closed yesterday, and investors are very happy with the report. Despite sales performance coming below expectations last quarter, the company paired Q3's numbers with some forward guidance that has the market excited.
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Leggett & Platt stock soars even as Q3 results miss targets
In the third quarter, Leggett & Platt saw non-GAAP (adjusted) earnings per share of $0.29 -- a performance that was in line with the average Wall Street analyst estimate. Meanwhile, sales for the period came in at $1 billion -- falling short of the average analyst target by $30 million. While sales fell roughly 9% year over year last quarter, the company's guidance suggests that sales declines could moderate in the near term.
NYSE: LEG
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What's next for Leggett & Platt
Even though Leggett & Platt's third-quarter sales came in lower than expected, the company actually narrowed its full-year revenue outlook in a way that is reassuring investors. While the company had previously targeted sales between $3.9 billion and $4.2 billion for the year, it now expects revenue to be between $4 billion and $4.1 billion. At the midpoint of the new guidance range, that would mean a sales decline of approximately 7.5%.
While guidance for a substantial sales decline might not sound particularly exciting, expectations for a mid-to-high single-digit sales volume decline aren't as bad as some investors were expecting. The company has also continued to make progress with its restructuring and reducing its debt and provided positive updates on the earnings outlook. Earnings per share (EPS) are now projected to be between $1.52 and $1.72, and adjusted earnings are expected be between $1 and $1.10 per share. Previously, the company had guided for EPS between $1.43 and $1.72 and adjusted EPS between $0.95 and $1.15.
